Gold and silver didn’t do much moving this week as spot prices stayed in roughly the same position on Friday as they were at the outset of the week. Some big news out of Europe did little to affect the price of precious metals while investors in North America were keeping a close eye on the latest installment of the Federal Reserve Open Market Committee meeting. Demand for metals, especially gold, was still high this week but with much of Asia celebrating a holiday during the midweek it is no surprise that spot values remained more or less constant.
FOMC Meeting
Whenever the Federal Reserve’s Open Market Committee has a meeting the market watchers of the world pay attention. Usually these meetings can influence how the price of gold and silver moves but this time such was not the case. While there were a large variety of people who thought we would hear some news in regards to Quantitative Easing and whether or not it would be stopped or slowed down, but that was not the case either.
In fact, no major news was to be reported from the FOMC and there was literally nothing about when or if QE was going to be slowed or stopped. This news pushed gold and silver forward, but only slightly.
Some Positive European News
It seems as though Europe has been a hotbed for terrible economic performance as of late, and the European Central Bank had a meeting this week to try and fix it. With mounting financial problems the whole eurozone needs to do something before all of their economies are in ruin. Noting that fact, the ECB decided to cut interest rates by a quarter of a percentage point to .5%.
The hope is that lower interest rates will jump-start seemingly dead economies but we will just have to wait and see if their initiatives work out. It is hard to believe that reduced interest rates will not boost the economy, but stranger things have happened before.
The Week Ahead
As we move into the next week, one thing to keep an eye on is the spot price of metals. While this may seem like a no-brainer, demand for precious metals is still on the rise and with the Asian market going to be hitting on all cylinders next week many are anticipating a good week for spot prices.
In addition to that, it will be interesting to see how the European marketplace reacts to the newly reduced interest rates and I feel as though next week will be a good time to get a feel for how European investors are handling the ECB’s decision.
Weekly Shift
Gold started the week on Monday with a spot value around $1,466 and at the end of the week it was sitting at $1,469. This is a gain of 3 dollars. Silver, which started the week at $24.11, ended at $24.10. This is a loss of one penny.